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Eleven months after B. Ramalinga Raju, the former chairman of Hyderabad-based Satyam Computer Services, confessed to masterminding a $1.2 billion fraud at Indias fourth largest I.T. outsourcing company, the dirt is still tumbling out. On Nov. 24, the country's Central Bureau of Investigation (CBI) released findings that show the alleged fraudulent accounting and embezzlement was far larger than originally thought. Raju and nine accomplices skimmed some $2.5 billion from the company, according to CBI investigators, funneling the money into a collection of assets and property that could make even a profligate Bollywood star blush...
...According to a 200-page CBI report, Satyam insiders forged board resolutions to secure $260 million in bank loans which were diverted for personal use, and over several years generated fake customer identities and account statements to inflate Satyam's revenues by millions of dollars, boosting the company's share price and making its books look far healthier than they were. Investigators following the paper trail have discovered that embezzled funds were channeled into 1,065 properties valued at $74 million, including some 6,000 acres of land, 40,000 sq. yd. of housing plots...
...CBI on Nov. 24 filed charges in court, and trials are likely to begin soon. Raju's lawyer, S. Bharat Kumar, was not available for comment. A spokesman for Satyam, which was purchased by the software arm of Mumbai-based auto conglomerate Mahindra & Mahindra earlier this year, declined comment, saying we haven't seen the charge sheet...
...Since then, two auditors of Satyam's accounting firm, PricewaterhouseCoopers (PwC), have been sitting in an Indian jail, accused of abetting the scheme. Narayana, the CBI deputy director general, said there was evidence indicating their involvement but declined to elaborate. Following the release of the CBI report, a PwC spokeswoman declined comment; the accounting firms top India executive in March denied any of its employees were involved in wrongdoing...
...CBI has concluded its investigation, but other federal agencies, including the Securities Exchange Board of India, are expected to step in and assist in identifying illicit assets acquired by Raju and his accomplices. In October, India's Enforcement Directorate attached about 280 properties owned by Raju and his extended family, which it said were obtained with embezzled funds. A senior government official says that more Satyam properties will be attached. More shoes will drop with a fraud of this magnitude, says Partha Iyengar, head of research at the India office of Gartner, the Connecticut-based I.T. research and advisory firm...